Chevron in the Circuit Courts

Transcription

1 Michigan Law Review Volume 116 Issue Chevron in the Circuit Courts Kent Barnett University of Georgia School of Law Christopher J. Walker Ohio State University Moritz College of Law Follow this and additional works at: Part of the Administrative Law Commons, Courts Commons, and the Supreme Court of the United States Commons Recommended Citation Kent Barnett & Christopher J. Walker, Chevron in the Circuit Courts, 116 Mich. L. Rev. 1 (2017). Available at: This Article is brought to you for free and open access by the Michigan Law Review at University of Michigan Law School Scholarship Repository. It has been accepted for inclusion in Michigan Law Review by an authorized editor of University of Michigan Law School Scholarship Repository. For more information, please contact mlaw.repository@umich.edu.

2 CHEVRON IN THE CIRCUIT COURTS Kent Barnett* & Christopher J. Walker** This Article presents findings from the most comprehensive empirical study to date on how the federal courts of appeals have applied Chevron deference the doctrine under which courts defer to a federal agency s reasonable interpretation of an ambiguous statute that it administers. Based on 1,558 agency interpretations the circuit courts reviewed from 2003 through 2013 (where they cited Chevron), we found that the circuit courts overall upheld 71% of interpretations and applied Chevron deference 77% of the time. But there was nearly a twenty-five-percentage-point difference in agency-win rates when the circuit courts applied Chevron deference than when they did not. Among many other findings, our study reveals important differences across circuits, agencies, agency formats, and subject matters as to judicial review of agency statutory interpretations. Based on prior empirical studies of judicial deference at the Supreme Court, however, our findings suggest that there may be a Chevron Supreme and a Chevron Regular: whereas Chevron may not have much of an effect on agency outcomes at the Supreme Court, Chevron deference seems to matter in the circuit courts. That there is a Chevron Supreme and a Chevron Regular may suggest that, in Chevron, the Supreme Court has an effective tool to supervise lower courts review of agency statutory interpretations. To render Chevron more effective in creating uniformity throughout the circuit courts, the Supreme Court needs to send clearer signals on how courts should apply the deference standard. Introduction... 2 I. Chevron s Ever-Changing Role... 9 A. Discursive Deference to Agencies Before Chevron...10 B. Chevron and Its Domain The Role of Formality...12 * Associate Professor, University of Georgia School of Law. ** Associate Professor, The Ohio State University Moritz College of Law. For helpful comments on prior drafts, many thanks to Michael Asimow, Nick Bagley, Emily Bremer, Aaron-Andrew Bruhl, Bill Eskridge, David Hausman, Kristin Hickman, Brian Kalt, Ron Levin, Gillian Metzger, Aaron Nielson, Jennifer Nou, Jim Oleske, Dick Pierce, Daphna Renan, Usha Rodrigues, Guy Rub, Michael Sant Ambrogio, Jed Stiglitz, Peter Strauss, and Adrian Vermeule and to the participants at the American Association of Law Schools Annual Meeting, the American Bar Association s Annual Administrative Law Conference, and the First Annual Administrative Law New Scholarship Roundtable. We are extremely grateful to our research assistants: Morgan Allyn, Lydia Bolander, Megan Bracher, Greg Dick, Mathew Doney, Sidney Eberhart, Lauren Farrar, JD Howard, Gregg Jacobson, Mariam Keramati, Patrick Leed, David McGee, James Mee, Andrew Mikac, Justin Nelson, Meghna Rao, Rita Rochford, Serge Rumyantsev, Kaile Sepnafski, Kyla Snow, Jonathan Stuart, Madison Troyer, Sonora Vanderberg-Jones, and Molly Werhan. Finally, we appreciate the Michigan Law Review editors careful attention to our Article. 1

3 2 Michigan Law Review [Vol. 116:1 2. Sensitive Questions...15 C. Chevron for Thee, But Not for Me...17 II. Empirical Study of Judicial Deference...18 A. Prior Empirical Studies of Chevron Key Studies Concerning the Supreme Court Key Studies Concerning Circuit Courts...20 B. Our Study Design and Methodology...21 C. Overview of Our Dataset...27 III. General Findings on Chevron in the Circuit Courts...28 A. Agency-Win Rates and Deference Differences...28 B. How Chevron Is Applied...32 C. Rulemaking Versus Adjudication Agency Procedure and Overall Agency-Win Rates Agency Procedure and Chevron...38 IV. Findings on Circuit Disparities...44 V. Findings on Agency and Subject Matter Differences...49 A. Subject Matter Differences...49 B. Agency Deference Rankings...52 C. Executive Versus Independent Agencies...56 VI. Additional Findings: What Else Matters?...58 A. Sensitive Matters...58 B. Interpretive Continuity...61 C. Traditional Deference Factors or Theoretical Grounds...66 Conclusion Introduction It is a bedrock principle of administrative law that a reviewing court must defer to a federal agency s reasonable interpretation of an ambiguous statute it administers. 1 This Chevron deference doctrine is both untouchable and yet always under attack. Chevron deference has been a cornerstone of judicial review of agency action for more than thirty years, and the decision itself is one of the most cited Supreme Court decisions of all time. Indeed, as of this writing, Chevron has been cited in more than 80,000 sources available on Westlaw, including in roughly 15,000 judicial decisions and nearly 18,000 law review articles and other secondary sources See Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984). 2. See, e.g., Aaron L. Nielson, Visualizing Change in Administrative Law, 49 Ga. L. Rev. 757, 786 (2015) (citing 1 Richard Pierce, Jr., Administrative Law Treatise 3.2 (5th ed. 2010)); Peter M. Shane & Christopher J. Walker, Foreword, Symposium on Chevron at 30: Looking Back and Looking Forward, 83 Fordham L. Rev. 475, 475 (2014).

4 October 2017] Chevron in the Circuit Courts 3 In these tens of thousands of sources, scholars, litigants, and judges have contested Chevron s theoretical grounding, 3 its provenance, 4 and its impact on case outcomes. 5 More recently, Supreme Court justices have questioned not only Chevron s reach 6 but also its very existence. 7 Congressional Republicans have followed suit by introducing legislation that would abolish Chevron deference and require courts to review agency statutory and regulatory interpretations de novo See, e.g., Stephen Breyer, Judicial Review of Questions of Law and Policy, 38 Admin. L. Rev. 363, 370 (1986) (referring to Chevron s delegation theory as a legal fiction ); Evan J. Criddle, Chevron s Consensus, 88 B.U. L. Rev. 1271, 1273 (2008) (arguing that Chevron s methodology is pluralistic because all leading theories of the administrative state support deference); Ronald J. Krotoszynski, Jr., Why Deference?: Implied Delegations, Agency Expertise, and the Misplaced Legacy of Skidmore, 54 Admin. L. Rev. 735, 737 (2002) (arguing that expertise should inform judicial deference, not delegation of interpretive primacy); Antonin Scalia, Judicial Deference to Administrative Interpretations of Law, 1989 Duke L.J. 511, 517 (arguing that Chevron s delegation theory is a fiction providing a background rule for legislative drafting). 4. See, e.g., John F. Duffy, Administrative Common Law in Judicial Review, 77 Tex. L. Rev. 113, (1998) (arguing that Chevron is inconsistent with the Administrative Procedure Act (APA)); Cynthia R. Farina, Statutory Interpretation and the Balance of Power in the Administrative State, 89 Colum. L. Rev. 452, 476 (1989) ( It is surely a far more remarkable step than Chevron acknowledged to number among Congress s constitutional prerogatives the power to compel courts to accept and enforce another entity s view of legal meaning whenever the law is ambiguous. ); Thomas W. Merrill & Kristin E. Hickman, Chevron s Domain, 89 Geo. L.J. 833, 868 (2001) (noting that if Chevron is federal common law, it does not coexist well with the judicial-review provisions of the APA). 5. See, e.g., Jack M. Beermann, End the Failed Chevron Experiment Now: How Chevron Has Failed and Why It Can and Should Be Overruled, 42 Conn. L. Rev. 779, 829 (2010); Richard J. Pierce, Jr., What Do the Studies of Judicial Review of Agency Actions Mean?, 63 Admin. L. Rev. 77, 85 (2011) (presenting ranges of agency affirmance rates under judicial-review doctrines and finding that differences are barely detectable, except for deference to agencies interpretations of their own regulations). 6. See Kent Barnett, Why Bias Challenges to Administrative Adjudication Should Succeed, 81 Mo. L. Rev. 1023, (2016) (noting the Court s ignoring of Chevron when it would have appeared to apply in Texas Department of Housing & Community Affairs v. Inclusive Communities Project, Inc., 135 S. Ct (2015), and the Court s refusal to apply Chevron to matters of deep economic and political significance in King v. Burwell, 135 S. Ct. 2480, 2489 (2015)). Three justices have argued that Chevron should not apply to agencies interpretations concerning the scope of the agency s authority. City of Arlington v. FCC, 133 S. Ct. 1863, (2013) (Roberts, C.J., dissenting). 7. E.g., Michigan v. EPA, 135 S. Ct. 2699, 2712 (2015) (Thomas, J., concurring) (arguing that Chevron deference presented serious separation-of-powers questions because it either, if interpreting a statute, contravened the original understanding that the Article III judicial power requires courts to say what the law is or, if making policy, improperly delegated legislative power (quoting Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803))). 8. See Separation of Powers Restoration Act of 2016, S. 2724, 114th Cong. 2 (2016) (amending the APA to require courts to review de novo all relevant questions of law, including the interpretation of constitutional and statutory provisions and rules ); Separation of Powers Restoration Act of 2016, H.R. 4768, 114th Cong. 2 (2016) (same); see also Christopher J. Walker, Courts Regulating the Regulators, RegBlog (Apr. 25, 2016), [ 2ZD5-6TQG] (explaining how pending legislation is an outgrowth of recent Supreme Court criticism of Chevron deference).

5 4 Michigan Law Review [Vol. 116:1 Much scholarly attention focuses on the use or absence of Chevron deference at the Supreme Court. Some scholars have focused on Chevron s domain that is, when Chevron applies in judicial review. 9 Others have considered empirically how consistently the Court applies Chevron. In their leading study concerning agency deference in the Supreme Court from 1984 to 2006, Bill Eskridge and Lauren Baer found that the Court applied Chevron deference only one quarter of the time that it would have seemed to apply. 10 When the Court applied the doctrine, agencies prevailed 76.2% of the time, a rate similar to those under other standards of review. 11 In other words, the Court s choice to apply Chevron deference, as opposed to a less-deferential doctrine or no deference at all, does not seem to affect the outcome of the case. Chevron deference at least at the Supreme Court does not seem to matter. As Richard Pierce has concluded, There is no empirical support for the widespread belief that choice of doctrine plays a major role in judicial review of agency actions. 12 Scholars and commenters, moreover, have noticed the Court s recent treatment of Chevron as a doctrine to ignore, disparage, or distinguish. 13 But Chevron in the Supreme Court is not our focus. Instead, we are most concerned here with how Chevron works on the ground in the circuit courts. Prior empirical studies of Chevron in the circuit courts were limited to a particular court, 14 particular agencies, 15 particular subject matter, 16 or a 9. See, e.g., Merrill & Hickman, supra note William N. Eskridge, Jr. & Lauren E. Baer, The Continuum of Deference: Supreme Court Treatment of Agency Statutory Interpretations from Chevron to Hamdan, 96 Geo. L.J. 1083, (2008); see also Thomas W. Merrill, Judicial Deference to Executive Precedent, 101 Yale L.J. 969, 982 (1992) ( [I]t is clear that Chevron is often ignored by the Supreme Court.... [T]he two-step framework has been used... only about one-third of the [time]. ). 11. Eskridge & Baer, supra note 10, at A later study by Thomas Miles and Cass Sunstein that considered decisions from 1989 until 2005 in which the Supreme Court invoked Chevron found that agencies prevailed only 67% of the time. Thomas J. Miles & Cass R. Sunstein, Do Judges Make Regulatory Policy? An Empirical Investigation of Chevron, 73 U. Chi. L. Rev. 823, 849 (2006). Since the period studied by Miles and Sunstein overlaps almost completely with the last fifteen years of the period studied by Eskridge and Baer, the lower affirmance rate found by Miles and Sunstein implies a decline in the Supreme Court s rate of affirmance in Chevron cases after Pierce, supra note 5, at Pierce, supra note 5, at 93; see also Stuart Minor Benjamin & Arti K. Rai, Administrative Power in the Era of Patent Stare Decisis, 65 Duke L.J. 1563, 1598 (2016). 13. See, e.g., Michael Herz, Chevron Is Dead; Long Live Chevron, 115 Colum. L. Rev. 1867, 1869 (2015) ( Some early commenters see these decisions as at least potentially marking a watershed moment, a fundamental shift from a regime of meaningful deference to a reassertion of judicial supremacy. ). 14. See, e.g., Frank B. Cross & Emerson H. Tiller, Judicial Partisanship and Obedience to Legal Doctrine: Whistleblowing on the Federal Courts of Appeals, 107 Yale L.J. 2155, 2168 (1998) (considering more than 200 D.C. Circuit decisions from 1991 to 1995). 15. See, e.g., Miles & Sunstein, supra note 11, at 825 (considering decisions from 1990 to 2004 concerning the NLRB or the EPA). 16. See, e.g., Jason J. Czarnezki, An Empirical Investigation of Judicial Decisionmaking, Statutory Interpretation, and the Chevron Doctrine in Environmental Law, 79 U. Colo. L. Rev.

6 October 2017] Chevron in the Circuit Courts 5 short timeframe. 17 They have also largely concentrated on the rates at which agencies prevail under Chevron and the likelihood of judges policy preferences affecting Chevron s application. 18 Our inquiry and scope are significantly broader. This Article presents the findings of the largest empirical study of Chevron in the circuit courts to determine how Chevron works outside the marbled enclave of One First Street. Our database of 2,272 judicial decisions, collected with broad search parameters, attempts to cull all published decisions from the circuit courts over an eleven-year period ( ) that refer to the Chevron doctrine. Within the relevant 1,327 of those collected opinions, we uncovered 1,558 instances of judicial review of an agency statutory interpretation (not merely any kind of agency action). Largely following Eskridge and Baer s methodology, we coded each agency statutory interpretation with respect to nearly forty different variables, including information about the decision (circuit, year, judges, and separate opinions); information about the agency interpretation (the agency, subject matter, final agency decisionmaker, agency procedure used, and ideological valence of agency s interpretation); and information about the judicial outcome (outcome as to agency, ideological valence of the decision, standard of review applied, and factors that influenced the court s decision). 19 This broad set of cases permitted us to consider all instances within our parameters in which the circuit courts applied the Chevron framework. This set also permitted us to review all instances in which the circuit courts, having referred to Chevron, reviewed agency interpretations de novo or under the Skidmore deference regime (under which courts defer to an agency s interpretation based on 767, (2008) (considering environmental-law cases in the circuit courts for a three-year period). 17. See, e.g., Orin S. Kerr, Shedding Light on Chevron: An Empirical Study of the Chevron Doctrine in the U.S. Courts of Appeals, 15 Yale J. on Reg. 1, 4 (1998) (considering more than 200 cases from 1995 to 1996); Peter H. Schuck & E. Donald Elliott, To the Chevron Station: An Empirical Study of Federal Administrative Law, 1990 Duke L.J. 984, (considering nearly 2,500 decisions, including those without published opinions, in six- or two-month periods during certain years to ascertain Chevron s effect on judicial review). Although the Schuck and Elliott study is important and comprehensive, its more-than-thirty-year-old data fail to address contemporary appellate practice after Skidmore and the Court s inconsistent use of its deference doctrines. Moreover, the decisions, too, included all administrative decisions, not just those concerning statutory interpretation, and the study did not identify the number of agency interpretations upheld or reversed because it considered only remand rates. See Linda R. Cohen & Matthew L. Spitzer, Solving the Chevron Puzzle, 57 Law & Contemp. Probs. 65, 91, 103 (1994). 18. See, e.g., Cohen & Spitzer, supra note 17, at ; Cross & Tiller, supra note 14, at (considering panel composition on agency-win rates); Miles & Sunstein, supra note 11, at Our Codebook, which lists all of the variables with descriptions, is available at Kent Barnett & Christopher J. Walker, Chevron in the Circuit Courts: The Codebook Appendix, 116 Mich. L. Rev. Online 1 (2017), 116MichLRevOnline1_BarnettWalker.pdf [

7 6 Michigan Law Review [Vol. 116:1 several factors, including the thoroughness of the agency s interpretation and its consistency with prior pronouncements). 20 This treasure trove of data, albeit with methodological limitations that we discuss in Section II.B, provides a number of often-surprising insights regarding deference to agency statutory interpretations in the circuit courts. Many of these findings suggest, with some caveats, that there may be a Chevron Supreme and a Chevron Regular: whereas the choice to apply Chevron deference may not matter that much at the Supreme Court, it seems to matter in the circuit courts. Consider the following key findings from the study: First, agency interpretations were significantly more likely to prevail under Chevron deference (77.4%) than Skidmore deference (56.0%) or, especially, de novo review (38.5%). In other words, agencies won significantly more in the circuit courts when Chevron deference applied, at least when the court expressly considered whether to apply Chevron. Indeed, there was nearly a twenty-five-percentage-point difference in agency-win rates with Chevron deference (77.4%) than without (53.6%). Because the agency-win rates in Eskridge and Baer s study of the Supreme Court were much more similar no matter whether Chevron (76.2%), Skidmore (73.5%), or de novo review (66.0%) applied, this was one of our first indications that Chevron Supreme differs from Chevron Regular. 21 Second, when Chevron s well-known two-step approach applied, the circuit courts resolved the matter at step one (i.e., the step at which the courts ask whether Congress s intent was clear) 30.0% of the time, and, of those Chevron step-one decisions, agencies prevailed 39.0% of the time. Of the 70.0% of the interpretations that moved to Chevron step two (the step at which the courts defer to reasonable agency interpretations when Congress s intent was not clear at step one), the agency prevailed 93.8% of the time. Based on albeit-dated data from Tom Merrill, Chevron Supreme does not behave like Chevron Regular. Merrill found that the Supreme Court resolved matters in the agency s favor 59% of the time at step one. 22 (Merrill and others after him did not report comparable data about the Supreme Court s step-two practice.) This difference may suggest that, given the higher likelihood of circuit-court review than Supreme Court review, agencies should give closer attention to the statutory language but that their step-two explanations are largely sufficient. 23 Third, as expected and as in the Supreme Court, formal agency interpretations prevailed at higher rates than informal ones, without regard to scope of review. But unlike in the Supreme Court, where the agency-win rate for formal adjudication (65.4%) was lower than notice-and-comment rulemaking (72.5%), 24 agency-win rates in formal adjudication were slightly higher 20. For a discussion of Skidmore deference, in which courts retain interpretive primacy and evaluate the weight to give an agency s interpretation, see infra Section I.A. 21. See infra Section III.A. 22. Merrill, supra note 10, at 981 tbl See infra Section III.B. 24. Eskridge & Baer, supra note 10, at 1148 tbl.17.

8 October 2017] Chevron in the Circuit Courts 7 (74.7%, or 81.3% when excluding immigration adjudications with idiosyncratic review procedures) than notice-and-comment rulemaking (72.8%) in the circuit courts. Formal interpretations, under a trilogy of Supreme Court decisions, 25 also unsurprisingly received Chevron deference at higher rates: 100.0% of the time for (albeit extremely rare) formal rulemaking, 91.9% for notice-and-comment rulemaking, and 76.7% for formal adjudication (or 85.2% if excluding immigration adjudications). Informal interpretations lagged behind at 44.8%. But, despite the Supreme Court treating legislative rulemaking and formal adjudication alike in its Chevron doctrine, our numbers revealed that the circuit courts applied the Chevron framework less frequently to formal adjudication than rulemaking. Perhaps even more surprising, when Chevron applied, interpretations in formal adjudications had a higher agency-win rate (81.7%, and 86.0% without immigration decisions) than notice-and-comment rulemaking (74.4%). These findings suggest that agencies may want to reconsider formal adjudication as a substitute to rulemaking as a means of adopting Chevron-eligible agency statutory interpretations, despite adjudication s fall in popularity since the 1970s. 26 Fourth, the circuit courts varied considerably as to overall agency-win rates, application of Chevron, and agency-win rates under Chevron. For overall rates, the First Circuit was the most agency friendly with an agencywin rate of 82.8%, while the Ninth Circuit was the least agency friendly with a rate of 65.8%. As for Chevron s application, the D.C. Circuit applied it almost as a matter of course at 88.6% of the time, while the Sixth Circuit applied it only 60.7% of the time. Once Chevron applied, though, the agency seemed to prevail as a rule in the Sixth Circuit (88.2% of the time, the highest rate), while the agency won only 72.3% of the time in the Ninth Circuit, the lowest rate. The differential between agency-win rates with and without Chevron indicates that agencies prevailed more in all circuits when Chevron applied. The most striking was the Sixth Circuit, with its nearly fifty-percentage-point difference in agency-win rates. Only the Eighth Circuit had a differential that was less than five percentage points, and the Eleventh Circuit was the only other circuit with a differential of less than ten percentage points. Although our data indicate that agencies win much more frequently when Chevron applies in all but one circuit, they also suggest that the Supreme Court may need to send clearer signals if the Court wants Chevron to apply evenly throughout the circuit courts. 27 Fifth, agency-win rates varied dramatically by subject matter and by the agency advancing the interpretation. For instance, the Federal Communications Commission (FCC) (82.5% overall agency-win rate), Treasury Department (78.9%), and, perhaps surprisingly, National Labor Relations Board (NLRB) (78.1%) were a few of the big winners among the agencies in the dataset. By contrast, the Equal Employment Opportunity Commission (EEOC) (42.9%), Energy Department (45.5%), and Department of Housing 25. See infra Section I.B See infra Section III.C. 27. See infra Part IV.

9 8 Michigan Law Review [Vol. 116:1 and Urban Development (HUD) (54.2%) were among the biggest losers in the circuit courts. The range of circuit courts applying Chevron deference also varied considerably from 100.0% for the Interstate Commerce Commission/Surface Transportation Board (ICC/STB) to 36.4% to the Federal Trade Commission (FTC). Moreover, independent agencies outperformed executive agencies as to overall agency-win rate (77.0% to 70.2%) and frequency of Chevron application (82.5% to 73.2%) though agency-win rate when Chevron applied evened out some (79.6% to 76.8%). Sixth, to our surprise, the circuit courts may not be as responsive to the Supreme Court s (often conflicting or vague) signals concerning exceptions to Chevron for certain sensitive questions. The circuits applied Chevron to two sensitive questions that we coded 74.3% of regulatory-jurisdiction questions and 76.0% of state-law preemption ones roughly at the same rate as the overall average (74.8%). Once Chevron applied, the agency-win rate for jurisdictional interpretations was lower at 70.5% than the average Chevron agency-win rate of 77.4% for all interpretations. But the 78.9% win rate for preemption interpretations was consistent with the overall average. The small population of sensitive-question interpretations, especially the preemption questions, limits the strength of inferences that one can draw from the data. But these data may suggest that at least for certain matters, the circuit courts have somewhat internalized the courts sensitive-question exceptions to Chevron as part of its overall analysis but not at step zero (i.e., the step where courts consider whether to apply Chevron s two-step approach). 28 Seventh, long-standing agency interpretations prevailed under all deference regimes combined at a much higher rate (82.3%) than those that were new and replaced no earlier interpretation (65.9%), those that were inconsistent with a prior interpretation (59.8%), and those whose duration we could not discern from the decision (67.8%). The circuit courts, consistent with Supreme Court doctrine but not practice, applied Chevron consistently to long-standing and new interpretations, and to our surprise at an even higher rate to inconsistent interpretations. But inconsistent agency interpretations prevailed under Chevron much less frequently (65.6%) than recent (74.7%) and long-standing interpretations (87.6%). Indeed, we found that agencies inconsistent interpretations prevailed significantly less than other interpretations under every review standard except de novo review (although much more frequently under Chevron than other review standards). Moreover, inconsistent interpretations based on new political administrations or unclear reasons were the least likely to prevail. These findings suggest that agencies seeking to change positions should work diligently to ensure that their interpretations receive Chevron deference (by having the force of law) and that they rely on grounds such as changed circumstances or accumulated expertise See infra Section VI.A. 29. See infra Section VI.B.

10 October 2017] Chevron in the Circuit Courts 9 Finally, we found that traditional contextual or theoretical grounds for deference do not have much expressed salience in the circuit courts. Courts mentioned only four of our nine coded factors in more than one in ten interpretations. The most salient factors were agency procedures, agency rulemaking authority, agency expertise, and interpretive stability. The first two s prominence are of little surprise because they track concerns for formality and delegation in leading precedent. Moreover, expertise and interpretive stability are factors for Skidmore deference and factors that the Court has mentioned as relevant to Chevron in one leading decision. But the absence of the other factors political accountability, public reliance, contemporaneity, uniformity in federal administrative law, and congressional acquiescence suggests that the circuit courts have found comfort in the Court s more rule-based line of decisions and have largely rebuffed another decision s more open-ended, sliding-scale inquiry that could give them additional discretion. 30 The Article proceeds as follows. Part I briefly discusses Chevron s birth, theoretical underpinnings, and evolution. Part II discusses prior empirical studies, our study design and methodology, and an overview of our dataset. Part III provides the 10,000-foot view of our findings, looking at agency-win rates, judicial application of Chevron deference (and its effect on agency-win rates), and the effect of agency procedures on outcomes and deference regimes. Part IV then disaggregates the findings by circuit, whereas Part V analyzes the results by agency and subject matter, including the differences between executive and independent agencies. Part VI examines what else seems to matter (or not) based on other variables in the dataset. The theoretical and normative implications of these findings, including how they support or cast doubt on existing doctrine and theory, are discussed in each of these Parts. The Article concludes by exploring the advantages of a Chevron Supreme and a Chevron Regular. Although Chevron may not have much of an effect on agency outcomes at the Supreme Court (based on prior empirical studies of the Court), it seems to matter markedly in the circuit courts. This may suggest that, in Chevron, the Supreme Court has an effective tool to supervise and rein in the lower courts in their review of agency statutory interpretations. But the Court needs to provide additional guidance to ensure that Chevron applies consistently throughout the circuits. I. Chevron s Ever-Changing Role Federal courts have a long-standing practice of deferring in some manner to federal agency statutory interpretations. But the level of deference, triggers for deference, exceptions from it, and judicial discussions of deference have fluctuated significantly. Our purpose here is not to provide a complete history of judicial deference. Instead, this Part contextualizes Chevron deference as necessary to understand the salience of our findings. 30. See infra Section VI.C.

11 10 Michigan Law Review [Vol. 116:1 A. Discursive Deference to Agencies Before Chevron Early federal courts deferred to agency action in two key ways. First, they deferred to discretionary, as opposed to ministerial, executive decisions in mandamus actions. 31 Second, outside of mandamus actions, they often respected agency interpretations of ambiguous statutory provisions when those interpretations were long-standing or contemporaneous with the statute s enactment. 32 As the administrative state grew in size and influence, debates surrounding the intensity of judicial review of agency legal interpretations became more urgent and strident. 33 Ultimately, the Supreme Court fluctuated from the New Deal until Chevron between three deference regimes. Consistent with NLRB v. Hearst Publications, Inc., the first line of decisions called for significant deference to agency interpretations that had a reasonable basis in law. 34 In that case, for example, the Court deferred to the NLRB s interpretation that it provided in its adjudication of employee, a broad statutory term, to include newsboys. 35 The Court grounded that deference on notions of congressional delegation to the agency to provide the interpretation and administrative expertise. 36 Skidmore v. Swift & Co., 37 decided only one Term after Hearst, was the standard-bearer for the second line of decisions in which the courts applied an indefinite, multifactored inquiry to deference questions. The Skidmore Court deferred to the flexible, contextual method that the Department of Labor s Wage and Hour Division called for in an interpretive ruling to determine whether waiting time was subject to overtime pay. 38 After noting that the agency s interpretations were not controlling on the courts, the Court held that they constitute[d] a body of experience and informed judgment to guide courts. 39 The weight to give this agency guidance depends 31. See, e.g., Kendall v. United States ex rel. Stokes, 37 U.S. (12 Pet.) 524, (1838); Marbury v. Madison, 5 U.S. (1 Cranch) 137, 170 (1803). 32. Aditya Bamzai, The Origins of Judicial Deference to Executive Interpretation, 126 Yale L.J. 908, 941 (2017). 33. See id. at (discussing judicial and academic debates concerning judicial review and challenges to the traditional approaches) U.S. 111, 131 (1944), overruled in part by Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992). 35. Hearst Publ ns, 322 U.S. at Id. at 130. See generally Kristin E. Hickman & Matthew D. Krueger, In Search of the Modern Skidmore Standard, 107 Colum. L. Rev. 1235, 1239 (2007) (collecting decisions) U.S. 134 (1944). 38. See Skidmore, 323 U.S. at Id.

12 October 2017] Chevron in the Circuit Courts 11 upon the thoroughness of the agency s consideration, the validity of its reasoning, its consistency with previous and later agency pronouncements, and all those factors which give it power to persuade. 40 The final line appeared to apply de novo judicial review, without deference to the agencies. Richard Pierce identifies NLRB v. Bell Aerospace Co. 41 as a key example in which the Court, ignoring the NLRB s contrary adjudicatory interpretation, substituted its own interpretation of the term employee under the National Labor Relations Act. 42 It did so without referring to notions of judicial deference. 43 As others have noted, the Supreme Court was not consistent, despite criticism from lower courts and despite scholarly efforts to provide a descriptive reconciliation of the competing scopes of review. 44 Nor did the Court seek to reconcile its various judicial-review regimes. But the Court s 1984 Chevron decision, despite failing to provide doctrinal reconciliation, appeared to provide clearer, simpler guidance. B. Chevron and Its Domain In Chevron, the Court famously created a two-step process for judicial review of agency statutory interpretations that appeared to apply whenever a court reviews an agency s construction of the statute which it administers. 45 As to the first inquiry, the court should determine if Congress has clearly provided its unambiguous intent on the issue. If Congress has not, then the court, in its second inquiry, should ask whether the agency s construction is permissible. 46 The Court expressly stated that the agency has room to adopt more than one reasonable interpretation, meaning that an agency s changed interpretation can receive deference. 47 The Court largely grounded Chevron deference on a theory that Congress had delegated interpretive primacy to the agency, instead of the courts. 48 But the Court also identified other theoretical support: agencies are institutionally superior to courts because of their expertise over complex statutory schemes, and executive officials are more politically accountable than judges Id. Since Skidmore, courts have relied on numerous other factors, including agency expertise, the contemporaneity and longevity of the agency s interpretation, formality, congressional acquiescence, and alignment between the agency s interpretation and congressional preferences. See Hickman & Krueger, supra note 36, at U.S. 267 (1974). 42. Pierce, supra note 2, at See Bell Aerospace Co., 416 U.S See, e.g., Pierce, supra note 2, 3.1, at 156; Colin S. Diver, Statutory Interpretation in the Administrative State, 133 U. Pa. L. Rev. 549, 562 n.95 (1985) (arguing that the Court relied on ten different factors pre-chevron). 45. Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, (1984). 46. Id. 47. See id. at Id. at See id. at

13 12 Michigan Law Review [Vol. 116:1 Courts and scholars largely understood Chevron as a significant restatement or recalibration of judicial review, 50 and it quickly gained prominence in the lower courts, especially the influential D.C. Circuit. 51 In so doing, questions concerning Chevron s domain quickly surfaced. 52 As we discuss in Section I.B.1, the most significant question was whether Chevron applied to all agency interpretations, or only those that were sufficiently formal. 53 In a trilogy of decisions from 2000 to 2002, the Court addressed when Chevron applied but sent inconsistent signals. As we discuss in Section I.B.2, additional questions arose as to Chevron s reach even when agencies provided formal interpretations, including: Does Chevron apply to an agency s pronouncement concerning its own jurisdiction? Or to an agency s preemption of state law? Or to questions of deep economic or political significance? 1. The Role of Formality In Christensen v. Harris County, the first of three key decisions concerning the role of formality, the Court held that an interpretation s formality influenced Chevron s applicability and indicated that informal interpretations were not eligible for Chevron deference. 54 The Court refused to apply Chevron to the Department of Labor s statutory interpretation in an opinion letter, noting that an opinion letter is not... a formal adjudication [that is, on-the-record adjudication under the APA] or notice-and-comment rulemaking. 55 The problem with interpretations in opinion letters, policy statements, agency manuals, and other guidelines is that they lack the force of law. 56 Instead, they are entitled only to respect under Skidmore. 57 Justice Scalia concurred, arguing that Skidmore was an anachronism, 58 that Chevron should apply to all authoritative agency positions, 59 and that the Court had, indeed, applied Chevron to more than formal adjudication and noticeand-comment rulemaking. 60 Justice Breyer, although dissenting, supported the majority s resuscitating Skidmore and contended that Chevron made no 50. See, e.g., Pierce, supra note 2, 3.4 (discussing benefits of Chevron s reconceptualization of judicial review); Keith Werhan, Principles of Administrative Law 372 (2d ed. 2014) ( Chevron fundamentally altered scope-of-review doctrine governing an agency s interpretations of its enabling act. ). 51. Gary Lawson, Federal Administrative Law (6th ed. 2013); Merrill & Hickman, supra note 4, at 838; Patricia M. Wald, The D.C. Circuit: Here and Now, 55 Geo. Wash. L. Rev. 718, (1987). 52. Merrill & Hickman, supra note 4, at (posing fourteen questions concerning Chevron s domain). 53. See id. at U.S. 576 (2000). 55. Christensen, 529 U.S. at Id. 57. Id. 58. Id. at 589 (Scalia, J., concurring in part and concurring in the judgment). 59. Id. at Id. at

14 October 2017] Chevron in the Circuit Courts 13 relevant change to judicial review. 61 Instead, all it did was focus on congressional delegation. 62 One year later, the Court doubled down in United States v. Mead Corp. but left room for informal interpretations to receive Chevron deference. 63 The Court provided more guidance for when Congress had delegated interpretive primacy to agencies: by giving agencies the authority to act with the force of law through relatively formal administrative procedure tending to foster... fairness and deliberation.... Thus, the overwhelming number of our cases applying Chevron deference have reviewed the fruits of notice-andcomment rulemaking or formal adjudication. 64 Indeed, earlier in its opinion, it had stated that [d]elegation... may be shown... by an agency s power to engage in adjudication or notice-and-comment rulemaking. 65 But, despite Christensen s contrary statements, the Court acknowledged that Chevron s applicability does not require such formality; the Court had bestowed Chevron deference upon informal agency interpretations. 66 In denying the U.S. Customs Service s letter rulings at issue Chevron deference, the Court found no evidence of congressional intent for the rulings to have the force of law. 67 The Court remanded for the lower courts to decide whether Skidmore deference applied. 68 Conspicuously absent was any indication that other values, such as expertise, mattered for triggering Chevron deference. Justice Scalia, this time in dissent, largely repeated his views in Christensen. 69 Soon thereafter, the Court suggested in dicta that Chevron s domain depended on more than the formality of agency action. In Barnhart v. Walton, the Court, after noting that the agency had exercised its rulemaking authority, deferred under Chevron to the Social Security Administration s reasonable statutory interpretation in a regulation. 70 But it didn t stop there. It held that the agency s interpretation was permissible because it made considerable sense, was of long-standing duration (even if the regulation itself was of recent vintage), and appeared to receive congressional acquiescence in light of the relevant statute s reenactment and amendment. 71 The Court s focus on the long-standing nature of the interpretation was surprising because it had held, in Chevron itself, that Chevron deference applies even 61. Id. at 596 (Breyer, J., dissenting). 62. Id U.S. 218 (2001). 64. Mead, 533 U.S. at Id. at Id. at Id. at Id. at See id. at (Scalia, J., dissenting) U.S. 212, 217, 222 (2002). 71. Barnhart, 535 U.S. at

15 14 Michigan Law Review [Vol. 116:1 when agencies change their interpretations. 72 Moreover, consistent with Mead, the Court stated that formality was not necessary. 73 And it stated, perhaps even more surprisingly, that formality was also insufficient, which appears inconsistent with Mead s strong suggestion that notice-and comment rules and formal adjudication always have the force of law to render agency action Chevron-eligible. 74 The Court then referred to other considerations, reminiscent of Skidmore s. 75 Mead, Christensen, and Barnhart altogether created the Mead Puzzle, creating uncertainty for courts and agencies as to which factors are necessary or sufficient to trigger Chevron deference. 76 Generally, notice-and-comment rulemaking and formal adjudication have been thought sufficient for Chevron eligibility, despite Barnhart s contrary suggestion, 77 and thus should be treated similarly. But lower courts, as Lisa Bressman has highlighted, have struggled with how to go about determining when informal interpretations are Chevron-eligible 78 and when they may engage in Chevron avoidance that is, accept the agency s view under Skidmore or de novo review without deciding whether the agency s interpretation has the force of law. 79 At the same time, scholars, including one of us, have debated formality s relationship with congressional delegation. 80 Some have argued that formality provides procedures that, in Mead s words, foster... fairness and deliberation 81 and provide a salience or transparency to permit congressional oversight. 82 Others have argued that whether Congress wants to have an agency act with 72. See Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, (1984); accord Nat l Cable & Telecomms. Ass n v. Brand X Internet Servs., 545 U.S. 967, (2005). 73. See Barnhart, 535 U.S. at 222 (noting that the presence or absence of notice-andcomment rulemaking [was not] dispositive in Mead). 74. See id. But see Lawson, supra note 51, at 590 ( Mead establishes that an agency interpretation that is promulgated as law and has an adequate procedural pedigree (informal notice-and-comment rulemaking qualifies for this purpose) will definitely get Chevron deference.... ). 75. See Barnhart, 535 U.S. at 222 (including the interstitial nature of the legal question, the related expertise of the Agency, the importance of the question to administration of the statute, the complexity of that administration, and the careful consideration the Agency has given the question over a long period of time ). 76. See Kent Barnett, Codifying Chevmore, 90 N.Y.U. L. Rev. 1, (2015). 77. See Lisa Schultz Bressman, How Mead Has Muddled Judicial Review of Agency Action, 58 Vand. L. Rev. 1443, (2005) (discussing views). 78. See id. at See id. at Barnett, supra note 76, at (discussing scholarly views); Lisa Schultz Bressman, Reclaiming the Legal Fiction of Congressional Delegation, 97 Va. L. Rev. 2009, (2011). 81. United States v. Mead Corp., 533 U.S. 218, 230 (2001); see also Bressman, supra note 77, at 1449 (contending that notice-and-comment rulemaking best ensures the transparency, deliberation, and consistency that produce fair and reasonable laws ); Merrill & Hickman, supra note 4, at (arguing for Chevron to apply only to notice-and-comment rulemaking and formal adjudication based on public-participation values). 82. See, e.g., Bressman, supra note 80, at

16 October 2017] Chevron in the Circuit Courts 15 the force of law is a separate question from whether Congress wants searching judicial oversight of the agency s binding actions Sensitive Questions Even with sufficient formality, it was and continues to be unclear whether Chevron applies to certain sensitive questions: so-called jurisdictional matters, preemption, and exceptionally important policy matters. In addressing these questions, the Supreme Court has often provided more guidance on the theoretical underpinnings of Chevron deference and its triggers. The Court in City of Arlington v. FCC held that agency decisions concerning their jurisdiction are eligible for Chevron deference, largely because of the difficulty in distinguishing jurisdictional questions from other statutory interpretations. 84 In resolving this long-simmering issue, the majority emphasized Chevron s place in the judicial-review firmament as a stabilizing doctrine in the lower courts, 85 but oddly it left Mead s place in doubt. Although the agency, according to the lower court, had engaged in informal adjudication with notice-and-comment opportunities, 86 the Court did not engage in a Mead inquiry into whether the action had the force of law. Instead, the majority relied on the fact that the agency had general rulemaking or adjudicatory authority and simply concluded without analysis that the agency had exercised that authority when providing its interpretation. 87 And it suggested that Barnhart s dicta that Chevron may not apply to formal adjudication or notice-and-comment rulemaking was disfavored because the Court had never denied Chevron deference to interpretations in those formats. 88 Justice Breyer, concurring, abided by his contextual Barnhart approach. 89 Three dissenting justices, similarly to Justice Breyer, would have applied a searching inquiry into whether Congress delegated interpretive primacy over the specific interpretation at issue See Barnett, supra note 76, at 20 21, 38 48; David J. Barron & Elena Kagan, Chevron s Nondelegation Doctrine, 2001 Sup. Ct. Rev. 201, 218. Merrill and Hickman also argued that formality itself was not determinative; instead, it was whether the agency had congressionally delegated authority to resolve controversies in a legally binding fashion. Merrill & Hickman, supra note 4, at See 133 S. Ct. 1863, (2013). 85. See City of Arlington, 133 S. Ct. at See City of Arlington v. FCC, 668 F.3d 229, 241, (5th Cir. 2012), aff d, 133 S. Ct (2013). 87. See City of Arlington, 133 S. Ct. at See id. 89. See id. at 1875 (Breyer, J., concurring in part and concurring in the judgment) (citing additional factors from Barnhart v. Walton, 535 U.S. 212, 222 (2002)). 90. See id. at 1881, 1883 (Roberts, C.J., dissenting).

17 16 Michigan Law Review [Vol. 116:1 The Court, however, has not squarely addressed state-law preemption. It has applied both Chevron and Skidmore to agency preemption decisions, albeit disagreeing with the agency in both instances. 91 Nina Mendelson has called for the Court to apply Skidmore deference based on agencies lack of expertise on federalism that influences preemption. 92 And as a matter of congressional delegation, Skidmore seems appropriate. In their survey of legislative drafters, Abbe Gluck and Lisa Bressman found that a majority of drafters do not think that Congress delegates preemption matters to agencies. 93 Likewise, one of us has surveyed agency rule drafters, who mostly thought that statutory ambiguity does not signal congressional delegation of preemption matters to agencies. 94 Finally, the Court recently held in King v. Burwell that Chevron does not apply to questions of deep economic and political significance that [are] central to [the] statutory scheme at issue. 95 In that case, the Court refused to defer to the IRS s interpretation of an Exchange established by the State. 96 Although, in previous cases, the Court had considered an issue s significance in deciding under Chevron step one whether Congress had clearly expressed its view, 97 this was only the second time that the Court refused to extend Chevron deference to an admittedly ambiguous statutory provision based on the significance of the matter. 98 Moreover, the earlier 91. Compare Cuomo v. Clearing House Ass n, 557 U.S. 519, 525 (2009) (applying the Chevron framework to the Office of the Comptroller of the Currency s preemption of state visitorial powers in notice-and-comment regulation), with Wyeth v. Levine, 555 U.S. 555, (2009) (applying Skidmore framework to agency s preemption decision in a noticeand-comment rule s preamble). 92. See Nina A. Mendelson, Chevron and Preemption, 102 Mich. L. Rev. 737, 742, 779 (2004). 93. Abbe R. Gluck & Lisa Schultz Bressman, Statutory Interpretation from the Inside An Empirical Study of Congressional Drafting, Delegation, and the Canons: Part I, 65 Stan. L. Rev. 901, 1004 (2013). 94. See Christopher J. Walker, Chevron Inside the Regulatory State: An Empirical Assessment, 83 Fordham L. Rev. 703, 721 (2014) ( [R]egarding preemption of state law, fewer than half (46 percent) agreed that Congress intends to delegate preemption questions by ambiguity. ) S. Ct. 2480, 2489 (2015) (quoting FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 160 (2000)). 96. King, 135 S. Ct. at See FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, (2000) (explaining that Congress has consistently precluded the FDA from regulating the tobacco industry, which constitute[s] a significant portion of the American economy ). 98. See King, 135 S. Ct. at 2492 ( [W]e cannot conclude that the phrase an Exchange established by the State under [42 U.S.C ] is unambiguous. (second alteration in original)); see also Gonzales v. Oregon, 546 U.S. 243, (2006). Justice Breyer joined the majority opinion in King. What may be surprising is that not only did he find that Chevron should not apply to these exceptional significant questions, but earlier he had also indicated that it should not apply, cryptically, to an unusually basic legal question. Nat l Cable & Telecomms. Ass n v. Brand X Internet Servs., 545 U.S. 967, 1004 (2005) (Breyer, J., concurring).